Department of Insurance puts company into receivership

Department of Insurance puts company into receivership
Department of Insurance puts company into receivership Photo credit USA Today

Insurance Commissioner Jim Donelon placed financially troubled homeowners insurance company Americas Insurance Company into receivership last week in the 19th Judicial District Court.

The move is an important step toward the Louisiana Insurance Guaranty Association taking over claim payments, ensuring that most policyholders with pending hurricane claims will get paid.

Since Hurricane Laura in 2020 and through Hurricane Ida in 2021, the Louisiana Department of Insurance (LDI) has fulfilled its most important role — protecting policyholders — by closely monitoring the solvency of property and casualty insurers operating in Louisiana.

The combination of hurricanes Laura, Delta and Zeta in 2020, which cost insurers $10.6 billion; Hurricane Ida, which is projected to cost insurers between $10 billion and $20 billion; and increasing labor and materials prices caused by the hurricanes as well as the recent spike in inflation, has put several insurers in danger of exhausting their reinsurance coverage and running out of money.

“My number one priority is protecting Louisiana policyholders, and my decision to place this company into receivership will help do that,” Commissioner Donelon said. “LIGA can pay up to $500,000 per claim, and they’re ready to handle what’s coming.”

Americas has approximately 24,000 policies and 13,000 Ida-related claims, and as of December 31, 2020, the insurer covered 1.31% of the Louisiana homeowners insurance market. Americas has been licensed in Louisiana since 1991.

Until recently, Americas was headquartered in Washington, D.C., although essentially all its polices were written — and all its Ida-related claims originated — in Louisiana.

LDI worked with Washington D.C.'s Department of Insurance, Securities, and Banking to move the company back to Louisiana so company could be placed in receivership and under the control of the state.

Donelon said policyholders with questions should contact their insurer or insurance agent. Policyholders with questions about claims should contact LIGA at 225-277-7151 or www.laiga.org. Policyholders may also contact LDI at 800-259-5300 or www.ldi.la.gov for assistance.

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